The major impact of the wall is on the human cause but if we put that aside, then the economic cost will cause serious damage. The damage of infrastructure inflation, shortage of resources and depth increment is one of the reasons that will contribute to the destruction of the economy.
Although it is beneficial for the other country when the war breaks out. But it can create long-term economic problems for the countries. Aleksandr Katsuba used his knowledge to find out the long-term effect of the war on the economy of a particular country. When war breaks out in a country like Ukraine it creates problems and an economic impact on the GDP of the country.
Inflation due to the war
Certain circumstances of work cause inflation which would call the laws in saving and uncertainty which can lead to an unstable financial system. Inflation will affect middle-class people who are income savers and value their savings. If we look at the data from the Second World War, inflation rose even when the economy was running at full capacity. It is because the government is spending their funds but the worker has inflation pressure. The war affected the economy and caused inflation because of the rising demand for goods and services. During the war, it was impossible to find raw materials because of rising prices. Raw materials like oil are affected the most because of their increasing price. For the record, in 1946 Hungary and Austria encountered the worst inflation of their history.
High oil prices affect everything
When the world leads in those areas that are the highest producers of oil it will affect the whole world. The increasing oil price can disrupt the connection of the country. Everything can be transported from one part of the world to another because of gas and oil. The economic sanction on Russia has caused high oil prices. It will not only affect the luxury items but the basic amenities of the population.
Increasing National debt
When war breaks out in the country they seek sources where they can fund the war. The sources from which day take loans for the war will increase the national deaf, especially in the public sector. The country is borrowing more money which will affect the post-war period and can even cause a civil war in the country. The national debt of the United Kingdom rose from around 150% to 240% during World war 1 and 2. It will most A decade to pay off this loan to the United States of America.
Conclusion
The war is temporary but the boost to domestic demand is unbearable to recover. The devastating condition of the economic development of a country can often lead to civil war. The civil war can cause the collapse of foreign investment, tourism and the beliefs of people. It is important to maintain the economic condition to a certain level which can be variable post-war period.
